MANGALURU: With a meagre 35% and 17% debt marketplace penetration in Government securities (G-secs) and corporate bonds, India is trailing developed economies like the United States of America (USA) where it's 83% and 123% respectively, famous a contemporary ASSOCHAM-Crisil joint find out about.
"Indian debt market also suffers from a skew towards sovereign paper, with G-secs (including treasury bills and state-development loans) accounting for three-fourths of the pie, while bank loans form predominant medium of corporate funding," consistent with an ASSOCHAM find out about collectively performed with score firm Crisil.
Though corporate bond marketplace has grown over time, it's closely tilted in opposition to top-rated papers and the banking, financial services and products and insurance coverage domains, each in number one and secondary segments.
It also highlighted a marked lack of participation, of each particular person and institutional investors. "While individual investors limit themselves to the most accessible bank fixed deposits (FDs), institutional investors, such as insurance and pension funds are restricted by regulatory constraints, especially in terms of preference to G-secs over bonds."
The document famous that while reaction of international portfolio investors (FPIs) has remained mixed, particular person investors are warming up to debt investments it seems that as their investments in debt mutual budget larger from Rs 74,386 crore as of March 2009 to Rs three.63 lakh crore as of September 2017.
It also mentioned that in recent years, a slew of macroeconomic and regulatory developments have aided expansion of debt marketplace.
On the economic front - strong inflation, fiscal development, a strong foreign money and addressing of structural rate of interest issues through linking transmission of rates of interest to small savings tools have helped.
While at the regulatory front the positives come with - implementation of Insolvency and Bankruptcy Code (IBC), uniform bond valuation, standardisation of issuance/reissuance and digital biddings, framework for massive borrowers, additional norms for credit rating businesses and corporate bond repos.
"But more needs to be done, in terms of investor awareness, development of new products and simplification of taxation structure," the document stated adding that bringing the next proportion of other people under organised sector employment, promotion of financial intermediation and measures to extend international investors into the debt marketplace would spur its expansion.
Highlighting the essential position of debt marketplace within the world economy, the ASSOCHAM-Crisil find out about mentioned that it advantages all 3 parties related i.e. issuers, investors and regulator/surroundings.
"Indian debt market also suffers from a skew towards sovereign paper, with G-secs (including treasury bills and state-development loans) accounting for three-fourths of the pie, while bank loans form predominant medium of corporate funding," consistent with an ASSOCHAM find out about collectively performed with score firm Crisil.
Though corporate bond marketplace has grown over time, it's closely tilted in opposition to top-rated papers and the banking, financial services and products and insurance coverage domains, each in number one and secondary segments.
It also highlighted a marked lack of participation, of each particular person and institutional investors. "While individual investors limit themselves to the most accessible bank fixed deposits (FDs), institutional investors, such as insurance and pension funds are restricted by regulatory constraints, especially in terms of preference to G-secs over bonds."
The document famous that while reaction of international portfolio investors (FPIs) has remained mixed, particular person investors are warming up to debt investments it seems that as their investments in debt mutual budget larger from Rs 74,386 crore as of March 2009 to Rs three.63 lakh crore as of September 2017.
It also mentioned that in recent years, a slew of macroeconomic and regulatory developments have aided expansion of debt marketplace.
On the economic front - strong inflation, fiscal development, a strong foreign money and addressing of structural rate of interest issues through linking transmission of rates of interest to small savings tools have helped.
While at the regulatory front the positives come with - implementation of Insolvency and Bankruptcy Code (IBC), uniform bond valuation, standardisation of issuance/reissuance and digital biddings, framework for massive borrowers, additional norms for credit rating businesses and corporate bond repos.
"But more needs to be done, in terms of investor awareness, development of new products and simplification of taxation structure," the document stated adding that bringing the next proportion of other people under organised sector employment, promotion of financial intermediation and measures to extend international investors into the debt marketplace would spur its expansion.
Highlighting the essential position of debt marketplace within the world economy, the ASSOCHAM-Crisil find out about mentioned that it advantages all 3 parties related i.e. issuers, investors and regulator/surroundings.
India trails developed debt markets by miles: ASSOCHAM-Crisil study
![India trails developed debt markets by miles: ASSOCHAM-Crisil study]()
Reviewed by Kailash
on
January 31, 2018
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